As a brand that was among the pioneers of being an internet based Indian business, how did you come up with the idea of your business model?
It was a different ball game then altogether. Not just in how you did business, but also what the consumer demands were. At best, compared to today, the consumer was happy limited in his needs. Most importantly, the virtual world was still to disrupt our lives as inclusively as it does today. It was still up for aspirations and experiments, far drawn away from the essentials we know now — speed, accuracy and relevance. Search was yet to become an engine of our lives.
The current business model of IndiaMART has evolved through various phases. When we began, we just didn’t have the money to match up to the ‘big’ requirements of the Indian market. At the same time, at the core of our idea was the belief that we needed to start something for the ‘small’. That was our opportunity. If you look at the growth trajectory of the 1990s, post Liberalisation, it was steady but slow for the small scale industries. Slow because of several reasons, including throwback of the License Raj, lack of intent as a market and economy, middlemen, low global market understanding and access, and, undue financial burdens and risks involved. Nonetheless, SMEs were north bound.
First, I wanted to set up an Internet Service Provider but Indian norms did not allow private participation then. Given the circumstances, the money we could muster, and the need within the SME sector to explore bigger buyer bases in India as well as abroad, we began making websites for them. Not only did a website enhance an SME’s presence beyond geographical barriers, but was slick, smart and a ‘now’ proposition. It made him look up-to-date and efficient. Although Internet and computer penetration were low, a business could look to access buyers in international markets. The fact that we broke even in the first year of operation bore testimony to steps in the right direction.
We, my cousin Brijesh and I, were salesmen during the day and techies at night, shaping the value-added services we sold, creating sites, designing and maintaining them. Soon we realised that our website business could be developed into a marketplace model. Initially, our operations were directed towards global markets, but later on around 2008-09 we realized the opportunities in the burgeoning Indian market and since then we have been focusing on domestic business.
With more of deep India getting connected to the web, and with majority of the partners on your platform relatively newer to the digital economy, what advice do you have for them?
Most of our audience is the MSME sector who might not have the resources and skill sets to adopt the digital economy. But, we have witnessed that this is not the case with only MSMEs but also with many large corporates. Many of the large corporates have made their first online presence only through IndiaMART. My advice to any business who is considering the idea of going digital would be to do it now. This is the best time to go digital. The kind of eco-system that the Government is creating will surely make technology more usable, accessible and affordable in the future.
What would you consider as the current challenges in your category, considering that demonetisation would have badly hit many buyer and suppliers across small India?
I believe that the impact of demonetization is temporary. What happened for most e-commerce companies was, cash-on-delivery – took the maximum hit during demonetization – but it made the room for cashless transactions, across consumer business, be it individuals or businesses. Of course, in the short-term there were challenges, but IndiaMART has recovered fast because we had already created a robust online payment system. At IndiaMART, we have witnessed a growth of 9000% in the demand of PoS and Card Swipe machines during November 2016. This speaks volumes about how the country’s small businesses are adapting themselves towards a Digital India. Moreover, the recent budget announcements will further bolster business in the long run. Some of the initiatives like imposing cash limit of Rs 3 lakh are even better than demonetization and will bring in more transparency.
How would you see and define your competition?
We have been the pioneers of B2B marketplaces in India. But now I am optimistic as many new players are entering the B2B market. More than competition I see it as growth for the entire eco-system. Fresh funds are getting infused in the B2B e-commerce space which is opening many avenues of growth and technological advancements. As businesses move online and with the latest push towards a cashless economy, B2B ecommerce is likely to see an upsurge after the current hiccups that tantamount to slowdown. I think business buyers too will move to the consumer space big time. Indian B2B e-commerce is expected to be around $700Bn by 2020, which means there is immense business opportunity for multiple players to enter the segment and grow.
How do you keep inspiring your teams to deliver to your vision for the company, and how do you translate that to the external businesses that work with you to bolster your brand and business?
IndiaMART has a vision ‘to make doing business easy’ and our team is solely dedicated to this vision. Whatever technology upgradation, process changes or business model modification we do are directed towards this goal of ours. As IndiaMART, we make sure that the team is passionate towards the work they are doing and also translate the same energy to our audience. We give utmost importance to trust whether it is for the team towards the company or for our customers towards the brand. And trust is not built in a day. If more than 29 Lakh suppliers and 3Crore buyers trust IndiaMART today with their businesses then it is because of our efforts in the past 20 years. We didn’t build it overnight.